Financial Blogger - Financial Information and News

6 Steps to take before bankruptcy

You may feel like you are in a financial hole so deep that you will never get out. Bankruptcy might look like the only way to solve your problems and get a fresh start. It’s not that easy, though. New laws that just came into effect have made it much harder for you to get a discharge of your personal debts through bankruptcy. That doesn’t mean that your situation is hopeless. The first thing you should do is work to get your debts under control. Here are three techniques which will help you do just that.

1. Find out what you are facing. Quite often the problem seems bigger than it really is. Gather together every debt that you have, write down what you owe and who you owe it to. Once you take a look at the problem on paper you might feel better about it. At the very least you will have a definite target to work towards instead of an uncertain enemy called debt. Once you have your debts listed, you can begin to make a plan. Look at the expenses that you can’t avoid – rent, car, etc. – and plan to pay them. Next, look at the interest rates of the other debts and determine the best order to tackle them. Once you have a plan and decide to stick to it you are on your way to a solution to your financial problems.

2. Cash or nothing. At the beginning of the month take a specific amount of money from your cheques in cash. This is your disposable income for the month. When it is gone you are done for the rest of the month. Essentially, you are giving yourself an allowance. It will be a shock at first, but after a while you will get used to this strict type of budgeting and you may even like it. It is empowering to use this method, because it allows you to set aside the money you need to deal with debt payment so you can pay off your debts more quickly.

3. Get your family involved. You may have got yourself to this point alone, but you don’t have to get out of it alone. Get your family involved. Be honest with them and let them know that you can solve the problem faster if you work together. If you turn saving into a game for kids, they will actually enjoy it. Have them look through the papers for coupons. Make it a game to see how much money your family can save in a month. Think of a fun but inexpensive prize you can give yourselves is you save more one month than you did the month before.

4. Say goodbye to ‘stuff’. Our houses are full of stuff that we are sure we needed at the time, but that lives in our closets now. We never use it and we don’t need it, but someone might. Use eBay or have a garage sale to get rid of the stuff that you can live without. You will feel better living in an uncluttered home and you will be surprised how much money you can raise doing this.

Credit Cards

3 Pitfalls to New Credit Card Offers You Should Know About

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We love credit! It’s a powerful tool that can give us the things we really want in life. Try buying a house completely in cash. You might have great-grandchildren before you actually pull off this goal. If you’re going to buy a house, chances are good that you’re going to need a mortgage. A bad credit score pulls down your ability to get a great mortgage. You can still find lenders that will take a chance on you, but they have to make money. They’re more than happy to charge you an enormous amount of interest just to have you own your own home. And since they’re shelling out the cash, they get to make the rules. You might have a lower limit of purchasing than another person, which means it’s going to be three times as hard to find your dream home. What a drag.

But it doesn’t have to be that way if you’re willing to use credit wisely and rebuild your score. Even if you have excellent credit, be aware that it only takes a handful of mishaps and mistakes to send your credit score plunging down.

Here are 3 pitfalls to new credit card offers that you should be aware of.

1. Expiration Dates on Promotions

When the credit card says “0% APR for six months”, they really do mean it. So you need to make sure that you get your purchases paid off on time, every time. If you have any balance due when that promotion is up, guess what? They will charge interest on it.

2. Order of Purchases

Cash advance? Purchase? Did you know that the credit card company categorizes these things ahead of time? If you are given a special promotion, you need to make sure that it actually goes for the type of purchase that you’re doing. If your promotion is for new purchases only, don’t expect to be able to use it with a balance transfer. And speaking of balance transfers…

Finance

Check Out 3 Ways to Save More Money This Summer

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Saving money and getting your finances in order is a good idea during the summer. For one, the children are home all the time, so you can include them on all of your decisions. It’s been shown that when children truly feel like you’re being mindful of their thoughts and emotions, they’re much more likely to respond favorably to you. They are also much more likely to be active in doing things that benefit the family as a whole. For example, if they’re prone to leaving the lights on in rooms where they aren’t even doing anything, they may turn off the lights more often. Same goes for water usage. They may try to make a game out of who can help the family save the most money. And let’s not even go into supermarket shopping, where it seems like they have an ongoing list of stuff they feel they have to have.

Below are three great ways to save even more money this summer than before.

1. Check Your Tariffs

You may be paying far more for electricity than you realize, just because you’re not following the yearly rates. See if switching to another provider will lower your utility bill any. If so, then you know what to do, don’t you? 🙂

2. Renegotiate Insurance Policies

Your family probably has a lot of policies they haven’t touched in a long time. Home insurance, car insurance, life assurance cover…the list goes on and on. If you haven’t checked whether or not you could save money on your premiums, then you’re basically losing savings that could help keep more money in your pocket.

To fix this, it’s best to call the company directly. Review your policy on the phone with them. If you don’t have a copy of the original contract you signed, get them to send you one first before you go into the negotiations. You want to be able to know your policy inside and out. What does it cover? What does it not cover?

Then when you have a firm grasp of your policy, ask for a better rate based on your solid payment history and low risk profile. Remember that in the world of insurance, risk is really the name of the game.

3. Make Sure ISAs are Topped Up

The new tax season is here, so you might as well get a jumpstart on your ISA. This is basically free money the Government is allowing you to keep. This year the limits have gone up to 15,000 GBP, giving you even more money that you can shelter. You may choose to keep it on the cash side or on the stocks & shares side. It’s completely up to you.

There are a lot of different ways to save money over the summer, but we thought these three tips would serve you especially well.

Mortgage

Is paying a mortgage better than renting?

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Many people feel that owning a property is cheaper than renting. They see that some people are paying less on their mortgage than they do in their rent and they feel that having a mortgage is the right things to do. However, there are other things to consider.

Firstly, if you own a house, you have to pay to maintain it. If there is any damage to the building you have to pay to get it fixed, you also have to pay to decorate it. You also have to pay the buildings insurance on it. If you have a mortgage you will also have to pay life insurance that will pay off the mortgage if you die.

If you rent, you will not have to pay out any of these extra expenses. If there is a problem with your house, you will be able to get the landlord to sort them out. It may take a while to get it done, but you will not have to pay out any money for it.

Owning a house does mean that you have something for your money. Some people feel like rent is throwing money down the drain, when having a mortgage means that you have money tied up in a property. The thing with this is that you will always need somewhere to live and so you cannot get to this money easily. In fact it is likely that it will only be available when you die. This means that your dependants will benefit from it, which could be something that you think is good.

It is difficult to say whether renting or mortgaging is better. It can depend on your own personal circumstances. You will have to pay for a house about three times over if you have a mortgage and you will have to pay to maintain it over the years and added in with the cost of the insurance it can come to a great deal of money. With renting, you are probably paying a lot less over the years, but you will have nothing to leave to your children when you no longer need a house.

Some people just cannot afford the deposit on a house to be able to have a mortgage. Then renting is going to be the only option for them. However, there are people who can afford a mortgage but would rather rent. It is all a matter of opinion really and something that you need to think hard about with your future in mind as well as your present situation. Talking it over with friends, family and work colleagues can be really helpful.

Debt

The Sheriffs are coming – do you know your rights?

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Having unpaid debt causes a great deal of stress. This stress can be made worse if you know you are expecting a visit from a Sheriff Officer about your debt. However, some of that stress can be eased by understanding a bit more about who Sheriff Officers are and the powers they hold.

This article will explain more about Sheriff Officers and what they can and can’t do. It will also tell you where you can get free help to deal with Sheriff Officers.

Who are Sheriff Officers and who do they work for?

Individuals, companies, solicitors, local authorities and government departments can go to the Sheriff Court to obtain court orders for things such as eviction, debt collection and property disputes.

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Sheriff Officers are officers of the Sheriff Court and they have the power to enforce court orders. They are engaged by the person or organisation that has obtained the court order to enforce it on their behalf.

There are lots of firms of Sheriff Officers in Scotland. You may have heard of some of the bigger names such as Scott and Co and Stirling Park. Sheriff Officers can also be self employed.

What powers do Sheriff Officers have to collect debt?

Councils may engage Sheriff Officers to enforce court orders to collect council tax, non domestic rates, housing benefit overpayment or former tenant arrears. Companies may engage them to collect unpaid consumer debt. Sheriff Officers act on behalf of the creditor (the person, organisation or business that is owed money).

Because they are officers of the Sheriff Court, Sheriff Officers have considerable powers to enforce court orders. However, their official status also means that what they can and can’t do – and can and can’t charge – is strictly regulated.

Sheriff Officers have the authority to negotiate with the person who owes the money to put a repayment plan in place. They can also request information such as employer details, National Insurance number and bank account details to help them with this.

If a repayment plan is not agreed and if the creditor obtains a formal charge for payment from the Sheriff Court, Sheriff Officers have further powers to help them collect the debt that is owed.

Mortgage

Do You Really Need a House in a Troubled Economy

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Some UK homeowners are starting to change the way that you’re looking at the real estate market. The truth is that you don’t have to own a home. Many people actually go their entire lives without owning their own home. However, there is something to be said about having something that’s yours. There is something to be said about having something that you can pass down to your children. But with interest rates being tempting, shouldn’t you go ahead and get your own home in this troubled economy anyway?

The answer might surprise you, but we don’t think that you should go out and automatically purchase a home. There are other factors that you’re going to have to think about if you’re really serious about being a homeowner for the long term. Of course, anybody can be a homeowner for the short term. They can just decide that they’ll make a few payments. But what if you have to think about the future? What if your job changes and you suddenly can’t get the things done that you really want to do? That’s where you start wondering if things are really going to be as put together as you think they will be. You have to start looking at the way the world is, not just the way you think it should be. If you don’t have job security now, why would you go out and get one of the top things in life where you really do need job security to maintain it? It’s something that just doesn’t make a whole lot of sense, if you ask us.

As long as you’re thinking about this, you need to stop and get a lot more on the plate than just these things. You have to think about how you’re going to save up for that deposit. Sure, you could try to get the home and pay a minimal deposit. But that’s going to bite you in terms of equity. They will also make you get additional insurance to cover the chance of default from the mortgage holder’s point of view.

You want to still think about maintenance costs and council taxes. Taxes and insurance and everything else on a home can be substantial. It’s too quick to just pull out a simple mortgage loan calculator and judge everything by the payments that you’re going to be making on the home. That’s just the mortgage. You have to think about everything that’s involved with the house.

Finance

Jonathan Daines, CEO of lettingaproperty.com comments:

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New year, new investment?

If one of your new year’s resolutions is to either become a first-time landlord or grow your property portfolio, don’t delay any longer – now is the time to act!

With stamp duty changes coming into effect from April, you should really begin thinking about your target market, aka your ideal tenant, and start the property search with them firmly in mind.

first-time landlord

Proximity to the property will influence whether you personally manage the investment yourself or have a high street letting agent manage it for you. The former will save valuable funds, which in-turn makes money over the year. For taking a few hours initially and an hour a month (if required) of your time, it may be worth it to some, particularly if you have a lower rental yield.

Any property bought closer to you will make it easier and cheaper to get tenant-ready and manage any maintenance issues directly. Keeping it local and within your control will always mean more money can be saved and revert what are normally high agency costs into a positive rental yield.

If you decide to take on a buy-to-let investment and manage it personally, you have saved and made money already! Online Letting agents, like lettingaproperty.com are here to facilitate these savings and have supported thousands of buy-to-let landlords already facilitate their investment process.

In the current market of attractive low interest rates, the new year is a great time to become a first-time landlord or grow an existing portfolio – but like all things, if you haven’t done your homework, financial gains can quickly turn to losses.

So if you are looking to invest in 2016 – go for it but make sure you weigh up all the pros and cons first and remember to do the maths!

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